US Stocks Reach New All-Time Highs on Fed’s Dovish Tone

US stocks wrapped up a strong week, with all three major indexes recording their biggest weekly gains of 2024. The Nasdaq 100 (orange line) led the charge, surging 2.75% for the week, while the Dow Jones (blue line)and S&P 500 (red line) rose 1.78% and 1.94%, respectively. 

This bullish run came on the heels of the Federal Reserve’s policy meeting on Wednesday. The Fed left interest rates unchanged but reiterated its dovish stance, reaffirming its plan for three rate cuts by year’s end. This dovish signal was music to investors’ ears, fuelling optimism and sending stocks rallying. 

Beyond the Fed’s message, enthusiasm for artificial intelligence (AI) continued to power the tech sector, with the semiconductor index experiencing a sharp weekly rise. This reflects the ongoing excitement surrounding AI advancements. 

However, Friday’s trading session saw a slight pullback, with the Dow and S&P dipping slightly and the Nasdaq edging higher. This could be a sign of profit-taking after the week’s strong gains or a potential pause before the next leg up. 

Looking ahead, some analysts anticipate a potential correction or sideways movement in the near future, given the recent market highs. Nevertheless, the positive sentiment from the Fed and strong sectoral performances provide a solid foundation for continued growth in the US stock market. 

Sources: TradingView, Trading Economics, Reuters, CNN, MarketScreener, Bloomberg. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.

Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.

CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.